Yes, you can buy Bitcoin on Fidelity, but only through a separate brokerage account
Fidelity lets you buy Bitcoin and other cryptocurrencies, but not in your regular investment account. You need to open a Fidelity Crypto account, which is a standalone brokerage account separate from your stocks, bonds, and mutual funds. This account is available to U.S. residents and operates independently — your crypto holdings do not sit in the same account as your retirement funds or taxable brokerage account.
The process is straightforward: you open the crypto account through Fidelity's website, fund it with dollars, and then buy Bitcoin or other supported cryptocurrencies. Fidelity currently supports Bitcoin and Ethereum as the primary options, though the list may expand. You can hold the cryptocurrency in your account or transfer it to an external wallet if you choose.
One important distinction: Fidelity's crypto account is different from their Bitcoin mutual fund (FBTC), which you can buy inside a regular Fidelity brokerage or retirement account. The mutual fund gives you exposure to Bitcoin's price without owning the actual cryptocurrency. The crypto account gives you direct ownership.
Key Takeaways
- Fidelity Crypto is a separate account from your regular brokerage or retirement accounts, and you must open it specifically to buy Bitcoin.
- You can buy Bitcoin directly or buy FBTC (a Bitcoin mutual fund) inside an existing Fidelity account if you prefer not to own the cryptocurrency itself.
- Fidelity currently supports Bitcoin and Ethereum in the crypto account, with the option to transfer holdings to an external wallet.
- Cryptocurrency purchases are subject to market volatility and carry different tax and regulatory treatment than traditional securities.
How to open a Fidelity Crypto account
Start by going to Fidelity's website and navigating to the crypto section. You will see an option to open a Fidelity Crypto account. The application asks for your personal information, Social Security number, and employment details — the same identity verification Fidelity uses for regular brokerage accounts.
Once your account is approved (usually within one business day), you link a bank account to fund it. You can transfer money from your bank using ACH, which typically takes three to five business days. After the funds arrive, you can place an order to buy Bitcoin at the current market price.
Fidelity does not charge a commission to buy or sell Bitcoin in the crypto account, but you will pay a spread — the difference between the bid and ask price — which varies depending on market conditions and the size of your order.
Bitcoin mutual fund versus direct Bitcoin ownership
If you already have a Fidelity brokerage account and do not want to open a separate crypto account, you can buy FBTC (Fidelity Bitcoin Fund) just like you would buy any mutual fund or ETF. This fund holds actual Bitcoin and tracks its price, so you get exposure without managing a separate account or dealing with cryptocurrency wallets.
The trade-off is simplicity versus direct control. FBTC sits in your regular account alongside your stocks and bonds, making it easier to manage taxes and transfers. But you do not own the Bitcoin itself — Fidelity holds it on your behalf. If you want to transfer Bitcoin to an external wallet or use it for transactions, direct ownership through the crypto account is the only option.
FBTC has an expense ratio (an annual fee), while the crypto account charges no ongoing account fees — only the spread on each transaction. For long-term holders, the crypto account may be cheaper. For people who want a simple, hands-off approach, FBTC is more convenient.
Funding and withdrawal options
You can fund your Fidelity Crypto account by linking a U.S. bank account and transferring money via ACH. Fidelity does not accept wire transfers, credit cards, or other payment methods for the crypto account. The transfer typically takes three to five business days to settle.
When you sell Bitcoin, the proceeds go back into your crypto account as cash. You can then transfer that cash back to your bank account using ACH, which again takes a few business days. If you want to withdraw Bitcoin itself (rather than dollars), you can transfer it to an external wallet address that you control.
There are no minimum deposit requirements to open the account, but Fidelity may set minimum order sizes for Bitcoin purchases — check the current minimums on their website, as these can change.
Tax reporting and record-keeping
Bitcoin purchases and sales are taxable events. When you sell Bitcoin for a profit, you owe capital gains tax on the difference between what you paid and what you sold it for. Fidelity will send you a 1099 form at tax time documenting your transactions, which you report to the IRS.
If you hold Bitcoin for more than one year before selling, you may have access to for long-term capital gains rates, which are usually lower than short-term rates. If you sell within a year, you pay short-term capital gains tax at your ordinary income tax rate.
Keep your own records of every purchase and sale, including the date and price. Fidelity's account statements show this information, but having your own backup records makes tax filing easier and protects you if there are any discrepancies.
Security and custody of your Bitcoin
When you hold Bitcoin in a Fidelity Crypto account, Fidelity acts as the custodian — they hold the private keys that control the Bitcoin on your behalf. This means you do not have to manage your own wallet or worry about losing access to your private keys, but you are trusting Fidelity to keep the Bitcoin secure.
Fidelity uses cold storage (offline vaults) for the majority of customer Bitcoin, which is considered a security best practice in the industry. Your account is also covered by Fidelity's standard account protections, though cryptocurrency is not covered by SIPC (Securities Investor Protection Corporation) the way stocks and bonds are.
If you want full control over your Bitcoin and do not want to rely on Fidelity's custody, you can transfer your holdings to an external wallet. This gives you complete control but also makes you responsible for keeping your private keys safe. Many people use a combination: holding some Bitcoin in Fidelity for convenience and some in a personal wallet for security.
Restrictions and limitations
Fidelity Crypto accounts are only available to U.S. residents. If you live outside the United States, you cannot open one. Additionally, some states may have additional restrictions or requirements — check Fidelity's website to confirm availability in your state.
You cannot buy Bitcoin on margin (borrowed money) in the crypto account. You can only spend dollars you have already deposited. This is different from some other cryptocurrency exchanges, which allow margin trading.
Fidelity currently supports only Bitcoin and Ethereum. If you want to buy other cryptocurrencies (altcoins), you will need to use a different exchange. Fidelity has not announced plans to add more cryptocurrencies to the account, though this could change.
Frequently Asked Questions
Can I transfer Bitcoin from another exchange into my Fidelity Crypto account?
Yes. You can transfer Bitcoin from an external wallet or another exchange to your Fidelity Crypto account by providing Fidelity with a deposit address. Fidelity will generate a unique address for your account, and you initiate the transfer from the other platform. The transfer typically takes a few hours to a few days depending on network congestion.
What happens to my Bitcoin if Fidelity goes out of business?
Your Bitcoin is held in custody by Fidelity, not owned by Fidelity. If the company were to fail, your Bitcoin would be returned to you or transferred to another custodian. However, cryptocurrency is not covered by SIPC insurance the way stocks are, so the legal protections are different. Fidelity's size and regulatory standing make this scenario unlikely, but it is a risk to understand.
Do I have to report Bitcoin holdings to the IRS even if I do not sell?
No. You only report Bitcoin sales and trades on your taxes. Simply holding Bitcoin does not create a taxable event. However, if you receive Bitcoin as income or a gift, there may be reporting requirements depending on the amount and circumstances — consult a tax professional for your specific situation.
Can I buy Bitcoin in my Fidelity retirement account?
No. Bitcoin cannot be held in an IRA, 401(k), or other retirement account at Fidelity. You can only buy Bitcoin in a taxable Fidelity Crypto account or through FBTC in a regular brokerage account. Some other custodians do offer Bitcoin in IRAs, but Fidelity does not.
What is the difference between the spread and a commission?
Fidelity charges no commission on Bitcoin trades, but you pay a spread — the difference between the price Fidelity pays to buy Bitcoin and the price they charge you to buy it. The spread varies based on market conditions and order size. On a small order, the spread might be 0.5% to 1%. On a large order, it could be smaller or larger. You will see the exact price before you confirm the purchase.